Eight in 10 people who responded to PR Newswire's recent survey on the Quiet Period believe it is outdated, but still necessary, while 32% say a too liberal Quiet Period could lead companies to hype their stock, according to the results announced today.
(Logo: http://www.newscom.com/cgi-bin/prnh/20000306/PRNLOGO )
The PR Newswire Quiet Period survey was designed to gauge respondents' perception and understanding of the Quiet Period. Enacted by the Securities and Exchange Commission (SEC), the Quiet Period is a set of regulations that govern corporate communications during a material event, such as a stock offering or merger/acquisition (See: SEC Rule 134 of the Securities Act of 1933 http://www.sec.gov/answers/quiet.htm). PR Newswire's survey was initiated in response to the SEC's recently announced plans to liberalize the rules which limit the amount of public discourse in which a company can engage during a material event.
The PR Newswire Quiet Period survey reflects the opinions of 125 executives at public companies, agencies and private companies, over 75% of whom have participated or advised during a quiet period. The survey was conducted between November 19, 2004 and December 9, 2004 by Greenfield Online, a leading independent provider of Internet survey solutions to the global marketing research industry.
Several overall trends were revealed in respondents' perceptions of the
Quiet Period:
* Of the 125 people surveyed, 67% either agreed or strongly agreed that
the SEC should liberalize the Quiet Period. 6% either disagreed or
strongly disagreed.
* An overwhelming majority, 78%, say they believe that the Quiet Period,
in its current state, is outdated. 4% did not agree that the Quiet
Period is outdated.
* When asked if the Quiet Period is beneficial to the marketplace, nearly
three-out-of-four, 73%, say they agree or strongly agree. 11%
disagreed.
* In further support of the Quiet Period, 73% either disagreed or
strongly disagreed that the SEC should eliminate the Quiet Period.
Only 10% favored its elimination altogether.
* When asked about the Quiet Period's impact on investors, 56% agreed or
strongly agreed that it hurts investors by limiting the amount of
information available. 14% either disagreed or strongly disagreed with
this statement.
* When asked if a too liberal Quiet Period would lead companies to hype
their stock, 32% agreed or strongly agreed, while a greater percentage,
43%, disagreed or strongly disagreed that hype was a risk.
* Six in 10, 61%, agreed or strongly agreed that the IPO process would
be made easier with a more liberal Quiet Period. 11% disagreed.
Responses to questions about the basic Quiet Period rules may reveal confusion about what constitutes compliance. Following are the results:
* When asked when the Quiet Period officially begins, 53% answered when a
company files a statement with the SEC, while 21% believed it is when a
company consults with bankers. 20% did not know.
* When asked when the Quiet Period officially ends, 46% answered 25 days
after the stock begins trading, while 25% contended it ends when the
stock begins trading. 22% did not know.
* 64% of respondents answered False to the question that the Quiet Period
ends if a stock fails to price on its intended day. 2% answered True,
while 34% did not know.
* Over half, 51%, say it is True that affected companies may conduct
media interviews on the day-of-trading. 22% said this was False; 26%
did not know.
* 72% of respondents answered True to the question that a company cannot
engage in public discourse outside of what is detailed in the
prospectus. 18% chose False, while 10% did not know.
* When asked if companies are allowed to make public announcements and
engage in media interviews if the subject matter concerns "normal
course of business" activities, 76% responded True, while 14% said
False. 10% did not know.
Commenting on the survey results, Michelle Savage, vice president of Investor Relations Services for PR Newswire, stated, "It is evident from this survey that respondents believe the SEC is moving in the right direction with its plans to liberalize the Quiet Period. While most respondents favor some controls over what can and cannot be said during a material event, the Quiet Period, in its current state, does not adequately meet the demands of today's business world.
Further, as indicated in the survey, the current rules of the Quiet Period are not clearly understood by all. With something as sensitive and important as an IPO or secondary offering, the rules and restrictions should be easy to understand."
The survey results, as well as topics related to the Quiet Period and IPO process, were discussed in an online panel hosted by PR Newswire on Thursday, December 9. Entitled, "Liberalizing the Quiet Period: Impact on Key Players," the archive of the panel discussion can be found on http://www.disclosureresource.com/.
For a full breakdown of the Quiet Period survey, please refer to the tables on the following pages.
About PR Newswire
Now in its 50th year, PR Newswire Association LLC (http://www.prnewswire.com/) provides electronic distribution, targeting, measurement, translation and broadcast services on behalf of some 40,000 corporate, government, association, labor, non-profit, and other customers worldwide. Using PR Newswire, these organizations reach a variety of critical audiences including the news media, the investment community, government decision-makers, and the general public with their up-to-the-minute, full-text news developments.
Established in 1954, PR Newswire has offices in 10 countries and routinely sends its customers' news to outlets in 135 countries and in 30 languages. Utilizing the latest in communications technology, PR Newswire content is considered a mainstay among news reporters, investors and individuals who seek breaking news from the source. PR Newswire's leading services include ProfNet Experts(SM), eWatch™, MEDIAtlas™, NewsPrompt™, Search Engine Visibility (SEV) and MultiVu™. PR Newswire is a subsidiary of United Business Media plc of London.
QUIET PERIOD SURVEY:
General Q's
Before you were invited to participate in this survey, were you aware
that the SEC is considering liberalizing the rules governing the quiet
period?
YES NO
Total (125) 61 64
% 48.80% 51.20%
Do you agree or disagree that the SEC's plans for "liberalizing" the
quiet period are necessary?
Strongly Agree Agree Neutral Disagree Strongly Disagree
Total (125) 26 57 34 6 1
% 21.60% 45.60% 27.20% 4.80% 0.80%
TOTAL AGREE 83 TOTAL DISAGREE: 7
% 67.20% % 5.60%
Do you agree or disagree that the quiet period in its present state is
outdated?
Strongly Agree Agree Neutral Disagree Strongly Disagree
Total (125) 32 65 23 5 0
% 25.60% 52.00% 18.40% 4.00% 0%
TOTAL AGREE: 97 TOTAL DISAGREE: 5
% 77.60% % 4.00%
Do you agree or disagree that the quiet period in some form is beneficial
to the marketplace?
Strongly Agree Agree Neutral Disagree Strongly Disagree
Total (125) 16 75 20 11 3
% 12.80% 60.00% 16.00% 8.80% 2.40%
TOTAL AGREE: 91 TOTAL DISAGREE: 14
% 72.80% % 11.20%
Do you agree or disagree that the SEC should eliminate the quiet period,
altogether?
Strongly Agree Agree Neutral Disagree Strongly Disagree
Total (125) 4 8 22 68 23
% 3.20% 6.40% 17.60% 54.40% 18.40%
TOTAL AGREE: 12 TOTAL DISAGREE: 91
% 9.60% % 72.80%
Do you agree or disagree that the quiet period, in its present state,
hurts investors by limiting the amount of information available?
Strongly Agree Agree Neutral Disagree Strongly Disagree
Total (125) 9 61 37 16 2
% 7.20% 48.80% 29.60% 12.80% 1.60%
TOTAL AGREE: 70 TOTAL DISAGREE: 18
% 56.00% % 14.40%
Do you agree or disagree that the quiet period, in its present state,
protects investors by limiting the amount of information available to
what is in the prospectus?
Strongly Agree Agree Neutral Disagree Strongly Disagree
Total (125) 1 32 43 44 5
% 0.80% 25.60% 34.40% 35.20% 4.00%
TOTAL AGREE: 33 TOTAL DISAGREE: 49
% 26.40% % 39.20%
Do you agree or disagree that a too liberal quiet period will lead
companies to hype their stock and create unfair trading situations?
Strongly Agree Agree Neutral Disagree Strongly Disagree
Total (125) 6 34 31 49 5
% 4.80% 27.20% 24.80% 39.20% 4.00%
TOTAL AGREE: 40 TOTAL DISAGREE: 54
% 32.00% % 43.20%
Do you agree or disagree that the liberalization of the quiet period will
make the IPO and stock offering process easier?
Strongly Agree Agree Neutral Disagree Strongly Disagree
Total (125) 13 63 35 14 0
% 10.40% 50.40% 28.00% 11.20% 0.00%
TOTAL AGREE: 76 TOTAL DISAGREE: 14
% 60.80% % 11.20%
Knowledge Q's
During an IPO, when does the quiet period officially begin?
When a When a company At the Don't Other
company consults files a statement onset Know
with bankers with the SEC of the
roadshow
Total (125) 26 66 4 25 4
% 20.80% 52.80% 3.20% 20.00% 3.20%
During an IPO, when does the quiet period officially end?
When the stock When the stock 25 days after Don't Other
prices begins trading stock begins Know
trading
Total (125) 7 31 58 28 1
% 5.60% 24.80% 46.40% 22.40% 0.80%
If an IPO fails to trade on the scheduled date, companies are free from
quiet period restrictions?
TRUE FALSE Don't know
Total (125) 3 80 42
% 2.40% 64.00% 33.60%
On the day of trading, a company can conduct media interviews?
TRUE FALSE Don't know
Total (125) 64 28 33
% 51.20% 22.40% 26.40%
During the quiet period, a company cannot engage in public discourse
outside of what is detailed in the prospectus?
TRUE FALSE Don't know
Total (125) 90 23 12
% 72.00% 18.40% 9.60%
During a quiet period, companies are allowed to make public announcements
and engage in media interviews if the action is part of the company's
normal course of business?
TRUE FALSE Don't know
Total (125) 95 18 12
% 76.00% 14.40% 9.60%
Personal Q's
Respondent works with:
Total (125) Total %
Publicly listed company 58 46.40%
Private Company 13 10.40%
Agency 46 36.80%
Association 0 0%
Regulatory Organization 0 0%
Student 0 0%
Other 8 6.40%
Job description best described as:
Total (125) Total %
Chairman/CEO/President 21 16.80%
CFO 1 0.80%
Investor Relations - VP/Manager 37 29.60%
Public Relations/Marketing -
VP/Manager 45 36.00%
Legal Counsel 2 1.60%
Journalist 1 0.80%
Research Analyst 1 0.80%
Other 17 13.60%
Have you participated in or provided advice during a quiet period related
to an IPO or additional stock offering?
Total (121) Total %
Yes, in the past six months 32 25.60%
Yes, six months to two years ago 14 11.20%
Yes, more than two years ago 22 18.40%
My company is currently in the middle
of a quiet period (or I am currently
advising a company during a quiet period) 9 7.20%
My company (or client I am advising)
is about to enter a quiet period 4 3.20%
No 42 34.40%
AP Archive: http://photoarchive.ap.org/
SOURCE: PR Newswire Association LLC
CONTACT: Jason Rando of The Ruth Group, +1-646-536-7025, or